Head-To-Head Analysis: SCI Engineered Materials (OTCMKTS:SCIA) vs. GCT Semiconductor (NYSE:GCTS)

GCT Semiconductor (NYSE:GCTS) and SCI Engineered Materials (OTCMKTS:SCIA) are both small-cap computer and technology companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, analyst recommendations, valuation, profitability, earnings and risk.

Risk and Volatility

GCT Semiconductor has a beta of 1.17, suggesting that its stock price is 17% more volatile than the S&P 500. Comparatively, SCI Engineered Materials has a beta of 0.96, suggesting that its stock price is 4% less volatile than the S&P 500.

Institutional and Insider Ownership

28.1% of GCT Semiconductor shares are held by institutional investors. Comparatively, 27.6% of SCI Engineered Materials shares are held by institutional investors. 5.4% of GCT Semiconductor shares are held by company insiders. Comparatively, 19.3% of SCI Engineered Materials shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings and price targets for GCT Semiconductor and SCI Engineered Materials, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
GCT Semiconductor	2	0	2	0	2.00
SCI Engineered Materials	0	0	0	0	0.00

GCT Semiconductor currently has a consensus target price of $3.50, suggesting a potential upside of 166.16%. Given GCT Semiconductor’s stronger consensus rating and higher probable upside, analysts clearly believe GCT Semiconductor is more favorable than SCI Engineered Materials.

Valuation and Earnings

This table compares GCT Semiconductor and SCI Engineered Materials”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
GCT Semiconductor	$2.87 million	33.25	-$43.37 million	($0.81)	-1.62
SCI Engineered Materials	$19.61 million	1.13	$1.75 million	$0.38	13.16

SCI Engineered Materials has higher revenue and earnings than GCT Semiconductor. GCT Semiconductor is trading at a lower price-to-earnings ratio than SCI Engineered Materials, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares GCT Semiconductor and SCI Engineered Materials’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
GCT Semiconductor	-1,513.33%	N/A	-231.27%
SCI Engineered Materials	8.91%	12.67%	9.93%

Summary

SCI Engineered Materials beats GCT Semiconductor on 8 of the 14 factors compared between the two stocks.

About GCT Semiconductor

GCT Semiconductor Holding, Inc., operates as a fabless semiconductor company, designs, develops, and markets integrated circuits for the wireless semiconductor industry. The company provides RF and modem chipsets based on 4G LTE technology, including 4G LTE, 4.5G LTE Advanced, and 4.75G LTE Advanced-Pro. It also develops and sells cellular IoT chipsets for low-speed mobile networks such as eMTC/NB-IOT/Sigfox, and other network protocols; and 5G solutions. Its products and solutions are used in smartphones, tablets, hotspots, CPEs, USB dongles, routers, and M2M applications. The company sells its products directly or indirectly through distributors to original equipment manufacturers and original design manufacturers primarily in Taiwan, China, Korea and Japan, Europe, North America and South America. The company was formerly known as Global Communication Technology, Inc. GCT Semiconductor Holding, Inc. was founded in 1998 and is headquartered in San Jose, California.

About SCI Engineered Materials

SCI Engineered Materials, Inc. engages in the manufacture and supply of materials for physical vapor deposition thin film applications in the United States. It offers ceramic targets, metal sputtering targets, and backing plates for use in semiconductors, thin film solar, flat panel displays, defense, aerospace, and photonics industries. The company’s materials are used to produce nano layers of metals and oxides for advanced material systems; and in applying decorative coatings for end uses, such as sink faucets to produce various electronic, photonic, and semiconductor products. It serves domestic and multi-national corporations, universities, and research institutions. The company was formerly known as Superconductive Components, Inc. and changed its name to SCI Engineered Materials, Inc. in 2007. SCI Engineered Materials, Inc. was incorporated in 1987 and is headquartered in Columbus, Ohio.